Look beyond equity markets

Equity futures look to be fading into the night and important levels to have been breached: S&P 4400, QQQ 350, AMD 100. It is important to understand the controlling narrative of the market: Energy/commodities/resources need to peak and China’s supply chain issues need to settle before the bond market can stop free-falling.

  • Expect more heightened volatility, BUT…
  • There is a greater chance of the fed becoming incrementally more dovish in 6-9 months rather than incrementally more hawkish. (A positive for equities)
  • Fundamentals were always just a narrative. Price action matters most.
  • Fresh relative lows for Microsoft and Nvidia. Most people are shitting bricks. An opportunity there.
  • Sentiment is at multi-decade lows (way too low), and the AAII bullishness sentiment survey is at the lowest level since 1992 here.
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This chart has been up since January.


Gold is still strong


GSG is coming back for vengeance


We were bullish GSG last week (+6%) in weak markets

AAII survey bullishness declined to the lowest level (15.8%) since 1992. 12m forward returns are typically+++

Return always wants its risk payment. Not Investment Advice.

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